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Maria Ajit Thomas, Reuters

Mar 6, 2014

, Last Updated: 1:17 PM ET

Staples Inc said it would close up to 225 stores in the United States and Canada - 12 percent of its North America outlets - and forecast another quarter of sales decline as it loses customers to mass market chains and e-retailers.

Shares of the largest U.S. office supplies retailer fell as much as 17 percent after the company also reported weaker-than-expected fourth-quarter results and forecast a profit for the current quarter that fell far below analysts' estimates.

Staples has 1,846 stores in the United States and Canada.

"Our customers are using less office supplies, they're shopping less often in our stores and more online, and their focus on value has made the marketplace even more competitive," Chief Executive Ronald Sargent said on a post-earnings call.

Staples said it had initiated a multi-year cost reduction plan that was expected to generate annualized pretax cost savings of about $500 million by 2015.

Analysts said the store closures, which would take place by 2015, were unlikely to boost the company's results in the near term.

"The company had years to close and shrink the store base and stuck to its guns, and that decision is likely to impact them for the foreseeable future. This is too little, too late," Janney Capital Markets analysts wrote in a note to clients.

The brokerage cut its rating on Staples' stock to "neutral" from "buy."

Staples and rival Office Depot Inc have been struggling to keep shoppers from turning to mass market merchants such as Wal-Mart Stores Inc and online retailers like Amazon.com Inc.

Office Depot, which reported a surprise quarterly loss last week, said it expected sales to continue to fall in 2014.